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    Maintenance Cost

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    Whafims
    This document discusses plant maintenance budgets and costs. It begins by introducing the importance of maintenance budgets for running maintenance departments effectively. It then describes how maintenance budgets are structured, including categories for income, expenses, and different cost centers. The document outlines the various elements that comprise the expense budget, including expected labor costs, materials, utilities, and overhead. It also discusses the benefits of the expense budget and how factors like production demands can influence the budget. The document elaborates on direct and indirect maintenance costs. Direct costs are easy to track, while indirect costs are more difficult to measure but still important to consider. It concludes with methods for controlling maintenance costs, such as understanding equipment needs and failures in order to schedule activities

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    © All Rights Reserved
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    Maintenance Cost

    Uploaded by

    Whafims
    271 views31 pages
    This document discusses plant maintenance budgets and costs. It begins by introducing the importance of maintenance budgets for running maintenance departments effectively. It then describes how maintenance budgets are structured, including categories for income, expenses, and different cost centers. The document outlines the various elements that comprise the expense budget, including expected labor costs, materials, utilities, and overhead. It also discusses the benefits of the expense budget and how factors like production demands can influence the budget. The document elaborates on direct and indirect maintenance costs. Direct costs are easy to track, while indirect costs are more difficult to measure but still important to consider. It concludes with methods for controlling maintenance costs, such as understanding equipment needs and failures in order to schedule activities

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    plant maintenance chapter 2

    Original Title

    maintenance cost

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    This document discusses plant maintenance budgets and costs. It begins by introducing the importance of maintenance budgets for running maintenance departments effectively. It then describes how maintenance budgets are structured, including categories for income, expenses, and different cost centers. The document outlines the various elements that comprise the expense budget, including expected labor costs, materials, utilities, and overhead. It also discusses the benefits of the expense budget and how factors like production demands can influence the budget. The document elaborates on direct and indirect maintenance costs. Direct costs are easy to track, while indirect costs are more difficult to measure but still important to consider. It concludes with methods for controlling maintenance costs, such as understanding equipment needs and failures in order to schedule activities

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    271 views31 pages

    Maintenance Cost

    Uploaded by

    Whafims
    This document discusses plant maintenance budgets and costs. It begins by introducing the importance of maintenance budgets for running maintenance departments effectively. It then describes how maintenance budgets are structured, including categories for income, expenses, and different cost centers. The document outlines the various elements that comprise the expense budget, including expected labor costs, materials, utilities, and overhead. It also discusses the benefits of the expense budget and how factors like production demands can influence the budget. The document elaborates on direct and indirect maintenance costs. Direct costs are easy to track, while indirect costs are more difficult to measure but still important to consider. It concludes with methods for controlling maintenance costs, such as understanding equipment needs and failures in order to schedule activities

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 31

    CPD 30103

    PLANT
    MAINTENANCE &
    INSPECTION
    KARTE 2.c
    MAINTENAN
    CE COST

    INCOME
    -Sales
    - Investment
    EXPENSE

    -Emolument
    -MRO
    -Consumable

    INCOME
    -Sales
    - Investment
    EXPENSE

    -Emolument
    -MRO
    -Consumable

    INCOME
    -Sales
    - Investment
    EXPENSE

    -Emolument
    -MRO
    -Consumable

    INCOME
    -Sales
    - Investment
    EXPENSE

    -Emolument
    -MRO
    -Consumable

    INTRODUCTION
    The maintenance budget (estimation of income and
    revenue) are necessary for running the maintenance
    department.
    Since facilities become automated and equipment more
    complicated, maintenance costs become a larger part of
    the costs of operations.
    Budgets comprise of cost centers, profit centers, single or
    combined programs, new technology applications,
    selected customer sector activities and other specialized
    budgets.

    THE CHART OF ACCOUNT


    The costs of goods and services listed in the
    budget under a number of categories called the
    chart of accounts.
    Each categories is called a line account, a line
    item or simply an account.
    Each account defines an individual type of
    expense such as labor, salaries, fringe benefits,
    fuels, electricity, repair parts , lubricants and so
    on.

    THE EXPENSE BUDGET


    It is detailed financial plan shows expected
    costs for the goods and services that will be
    needed.
    The amount represents the labor, parts, utility
    service, tool, overhead and other items;
    including project planning.
    The budget also influenced by
    increasing/decreasing production or service
    demand, growth and situations.
    Consists of: operating expense statement and
    value of the expense budget.

    THE OPERATING EXPENSE STATEMENT


    A report that produced each month or accounting
    period.
    The report are useful as a tool to monitor and control
    costs of selected line items.

    BENEFITS OF THE EXPENSE BUDGET


    Detailed plan for financial activities over the budget
    planning period.
    Factors affecting maintenance budgeting: expected level of
    productions, new product or services and introduction of
    new equipment.
    Other consideration: new management program, major
    overhaul or remodeling projects, expected overtime
    required, new tools and equipment, additional management
    responsibilities and expected cost reduction program.

    THE CAPITAL BUDGET


    Usually compiled and administrated by senior management
    office.
    Provides a funds for non-recurring projects such as major
    renovations, construction, additional space, installations of
    major equipment.
    Capital budget consists mainly of defined projects, their
    priority and estimated cost and expected start and
    completion dates.

    PREPARATION OF THE BUDGET


    Reviewed variances from year-to-date and monthly budget
    amounts.
    Reviewed the effect of variables (such as special projects)
    on each line item.
    Aware the fluctuations of economy trends
    Reviewed between expense and capital budgets.

    MAINTENANCE COST
    [Oxford] - an amount that has to be paid or spent
    to buy or obtain something
    Maintenance cost refers to he costs incurred to
    keep an item in good condition and/or good
    working order.
    Therefore, maintenance budget should be tied with
    the overall organizational objectives.
    Maintenance budget can avoid maintenance
    shortfalls that might impact production or service
    costs.

    Typically, maintenance cost can be divided into two


    main categories.
    The first referred as direct costs are easy to justify
    and to report.
    The other group of maintenance costs is hidden
    costs or indirect costs which are harder to
    measure.

    DIRECT MAINTENANCE COSTS


    Direct maintenance costs are easy to justify and to
    report, it is the costs of the labor, materials and
    outsourced required to perform servicing, repair,
    modification, restoration, inspection, test, and
    troubleshooting tasks during on-airplane and shop
    maintenance activities.
    Maintenance overhead costs are unallocated
    labor costs and the expenses for maintenance
    supervision, training, and planning; equipment
    rental; and utilities.

    INDIRECT MAINTENANCE COSTS


    Conversely, indirect costs is the cost that are
    not directly associated with a single activity,
    event, or other cost object. For example;
    Excessive inventory
    Emergency purchases
    Start-up (unexpected changes and
    machine breakdown)
    Indirect maintenance can create loss of
    revenue or other losses as a result of
    interruption to production.

    COST CONTROL
    Maintenance cost control is accomplished by the following means:
    1. Understanding the number of equipment sets
    2. Defining criticality, so that non-critical or low-cost equipment
    will not be maintained and only critical and high-value
    equipment will be maintained
    3. Proper scheduling of activities
    4. Using predictive technologies appropriately
    5. Collecting data for statistical process control (SPC) to evaluate
    mean time between failures (MTBF), cost of maintenance,
    failure rates, and so on
    6. Performing root-cause analysis on failures to develop various
    approaches to maintaining the equipment, or providing training
    as required to improve skills based on new technologies, or
    identifying poorly designed equipment to be replaced.

    Bath Tub Curve


    The bath tub curve describes the cost
    of equipment over its lifespan. From
    commissioning to winding up.
    bathtub curve indicates that a new
    machine has a high probability of
    failure, because of installation
    problems, during the first few weeks
    of operation.

    Root-Cause Analysis (RCA)


    a class of problem solving methods aimed at
    identifying the root causes of problems
    Example:

    Failure mode and effects analysis (FMEA)


    Fault tree analysis
    5 Whys
    Ishikawa diagram

    Basic element of RCA


    Materials

    Defective raw material


    Wrong type for job
    Lack of raw material

    Machine / Equipment

    Incorrect tool selection


    Poor maintenance or design
    Poor equipment or tool placement
    Defective equipment or tool

    Environment

    Orderly workplace
    Job design or layout of work
    Surfaces poorly maintained

    Root-cause analysis
    Methods
    No or poor procedures
    Practices are not the same as written procedures
    Poor communication

    Management system

    Training or education lacking


    Poor employee involvement
    Poor recognition of hazard
    Previously identified hazards were not eliminated

    Ishikawa diagram

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